Extension of Short Selling Ban to Be Decided 'After Lunar New Year Holiday'

[Asia Economy Reporter Oh Ju-yeon] The decision on whether to extend the short-selling ban period, which ends on March 15, will be made after the Lunar New Year holiday.

On the 3rd, Yang Hyang-ja, a Supreme Council member of the Democratic Party of Korea, said in a phone interview with Asia Economy, "The results of the short-selling simulation need to come out, but it is difficult before the Lunar New Year," adding, "Based on discussions with ruling party lawmakers and responsible parties within the party, the results are expected around late February."

It is anticipated that the Financial Services Commission will announce its official stance on short-selling at its regular meeting on the 17th, after which a final decision on whether to extend the short-selling ban will be made through consultations between the ruling party and the government. Within the party, discussions are already underway on the period and methods assuming an extension of the short-selling ban, including proposals for a 3-month or 6-month extension and the scope of short-selling allowed upon partial resumption.

At the same time, efforts are being focused on conveying the necessity of extending the short-selling ban to financial authorities. Song Young-gil, a Democratic Party lawmaker who has strongly criticized market manipulation by short-selling forces, plans to meet with Yoon Seok-heon, Governor of the Financial Supervisory Service, to express opposition to the resumption of short-selling. Governor Yoon had previously suggested at the 2019 National Assembly audit that the short-selling system for small-cap stocks could be partially abolished.

In a phone call, Rep. Song said, "In principle, short-selling should be abolished," and added, "I oppose resuming it in the current situation. I plan to meet with the Governor of the Financial Supervisory Service soon to convey this opinion."

This content was produced with the assistance of AI translation services.